You’d struggle to find a better-performing asset in 2021 than Shiba Inu (CRYPTO: SHIB). This dog-inspired meme token absolutely skyrocketed to eye-watering levels along with the broader cryptocurrency market. However, since that peak, it has come plunged 90%.
Some investors might look at Shiba Inu and its beaten-down price as a potential buying opportunity, with the hope that high returns can happen in short order. But I think it’s best to simply avoid this token. Instead, focus your attention on a more proven cryptocurrency that’s poised to go on an unstoppable run.
After looking at Shiba Inu, you would be challenged to find any true competitive edge. The token is built on top of the Ethereum network, making it compatible with a vast ecosystem of decentralized applications. But this means that it doesn’t have any real differentiation itself. Instead, it relies on Ethereum’s capabilities for its own success.
Shiba Inu also doesn’t have any meaningful utility. To be fair, the Shibarium Layer-2 scaling solution that was just launched aims to lower fees and increase transaction speeds. But nothing is guaranteed, and there is still a lot of technical and implementation risk. Moreover, developers and users looking at spending their time and money will be better off focusing on Ethereum.
To its credit, Shiba Inu is the 19th most valuable cryptocurrency with a market cap of about $5 billion, thanks to its strong marketing and ability to retain a supportive community of followers. But it’s clear that its price moves based on various hype cycles, something that no one should put their capital behind.
It’s a smart idea to ignore Shiba Inu, no matter how much you might believe the hype. Instead, investors should keep things simple and look at the top dog in the crypto industry. I’m talking about Bitcoin (CRYPTO: BTC). Even after its price has soared 120% this year, the world’s leading digital asset still has lots of room to run.
Bitcoin’s defining characteristic is that there will only ever be 21 million coins in circulation. The supply growth rate is set in the software’s code, and unless the majority of participants agree to make a change, 21 million is a hard cap that will stay the same. This is in stark contrast to virtually all other cryptocurrencies that have increasing token supplies. Shiba Inu currently has 589 trillion outstanding.
A supply cap, coupled with steadily rising demand, is the recipe for a higher price over time. We’ve seen this with Bitcoin. Its price is up 61-fold in the past decade, a gain that crushes the broader stock market.
It’s worth understanding that while Shiba Inu might be a solution that’s looking for a problem to solve, Bitcoin could be a solution to the problems caused by a fiat-backed currency. The U.S. government currently has $33.7 trillion of debt outstanding, a figure that keeps rising due to persistent budget deficits. In fact, the debt-to-GDP ratio of about 130% is much higher than it was 25 years ago.
A burgeoning U.S. debt load means continuous increases in the money supply to satisfy the interest payments. It’s like taking out a new credit card to help pay off an old one. This just isn’t sustainable in the long run, even if the U.S. dollar is the global reserve currency.
A decentralized monetary network that isn’t controlled by a single entity, and that has a known supply growth rate, is a possible solution to the current monetary system. And that’s Bitcoin. It’s anyone’s guess what this leading cryptocurrency’s market cap will be one day, but by trying to create better money, it’s obvious that Bitcoin’s total addressable market is enormous.
It’s easy to get caught in the hype surrounding a meme token like Shiba Inu. However, smart investors will direct their capital toward a proven winner. In my opinion, that’s Bitcoin.
10 stocks we like better than Bitcoin
When our analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now… and Bitcoin wasn’t one of them! That’s right — they think these 10 stocks are even better buys.
*Stock Advisor returns as of November 6, 2023
Blog powered by G6
Disclaimer! A guest author has made this post. G6 has not checked the post. its content and attachments and under no circumstances will G6 be held responsible or liable in any way for any claims, damages, losses, expenses, costs or liabilities whatsoever (including, without limitation, any direct or indirect damages for loss of profits, business interruption or loss of information) resulting or arising directly or indirectly from your use of or inability to use this website or any websites linked to it, or from your reliance on the information and material on this website, even if the G6 has been advised of the possibility of such damages in advance.
For any inquiries, please contact [email protected]